Rumor: Apple to open Shanghai R&D center this summer

Apple is rumored to announce the opening of a research and development center in China later this year, with the large three-building campus said to be located in the Pudong area of Shanghai.

Rumored Apple R&D facility in Shanghai, China. | Source: CNET China

Citing people familiar with the project, CNET China (via global news service BrightWire) reports that the facility will consist of three six-story buildings built in a Baroque style with a total area covering over 100,000 square feet. The news comes just days after a similar report claimed Apple would be opening both an R&D center and a data center in Beijing.

The sources claim Apple began laying out the project six or seven years ago and plans to take residence in the space this summer. They go on to say that while construction of the center's exterior is complete, the interior has yet to be decorated. When the project is complete, Apple is expected to pay an annual rent of over 50 million yuan, or more than $8 million.

China is widely thought to be a major growth market for Apple, especially in regard to the company's mobile device lineup. Earlier in January, Apple CEO Tim Cook visited China for the second time in ten months, where he met with the country's head of industry and information technology Miao Wei. It was also confirmed that Apple chief held a meeting with the world's largest wireless carrier China Mobile, which currently does not carry the iPhone.

Might be a struggle to fit all that onto the back of an iPhone. Perhaps that's the reason behind the 5" iPhone rumors?

Quote:

Originally Posted by Cash907

Dodge those taxes, Timmy. Dodge, Duck, Dip, Dive and Dodge!

I think you are both missing the point. There are plenty of taxes to be paid here in china. If true, one of the likely reasons to do this is so that the local consumers don't have to pay the import taxes that are currently levied against all apple products. This makes them more expensive here than in the US.

Thats where the future money is. Yes we already sell and pay for products made there, but the big profits is in China and Apple knows it.

Google knows it too. And they have a serious "China problem." And they can't do a thing about it. Google never had more than 29% of the search engine traffic in China, Baidu being #1:

Eric Schmidt Quote:

Because of the China (political) situation, anything we do with China is more complicated than with anywhere else.

Oh, and Android generates zero revenue for Google in China. Sure, there are umpteen no-brand Android clones-of-clones littering the streets. But there are over 70 Android "app stores" in Beijing alone. All of which compete against Google Play. None of which generates a single penny of revenue for Google. Oopsies.

Eric Schmidt Quote:

I counted more than 70 (app) stores of one kind or another, and I was just in Beijing. ... It’s a real problem and we’re working on that.

Dumb move in my opinion. The Chinese do not value IP and partnerships the same way places like the US does. Apple and other companies are already seeing some of the consequences of moving operations to asian countries in terms of manufacturing. I know Samsung is not a Chinese Company, but the concept is the same. Apple invests heavily in Samsung's manufacturing business (over a hundred million alone to its LCD plant). Once the company is established and figures out how to make the American company's product, it uses its resources to knock out cheaper imitations. Since it owns the factories and doesn't have to play by US accounting rules, it can knock out the products at a lower cost. Another good example is with ASUS, which Dell helped set up to make notebooks. Eventually ASUS decided to take the insight Dell had given it to go and compete with Dell.

Further, when manufacturing was in the US and other Western companies, the type of leaks you hear about now, were not heard about on such a scale. Whenever a valid Apple rumor slips out the source is usually a manufacturing partner in China. I also haven't really seen evidence that the cost of Apple playing in China is paying dividends. It can't get a deal done with the largest Chinese Mobile operator.

I think you are both missing the point. There are plenty of taxes to be paid here in china. If true, one of the likely reasons to do this is so that the local consumers don't have to pay the import taxes that are currently levied against all apple products. This makes them more expensive here than in the US.

There are no import taxes on Apple products coming from overseas into the US. Once a trade cap is reached, taxes can be avoided by shipping product through Canada and Mexico thanks to NAFTA. Most of Apple's products are made in China, so import taxes would not apply there as nothing is being imported.

There are no import taxes on Apple products coming from overseas into the US. Once a trade cap is reached, taxes can be avoided by shipping product through Canada and Mexico thanks to NAFTA. Most of Apple's products are made in China, so import taxes would not apply there as nothing is being imported.